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Silver Spring Networks Reports Preliminary Results for Fourth Quarter and Full Year 2013

REDWOOD CITY, Calif. --(Business Wire)--

Silver Spring Networks, Inc. (NYSE: SSNI), a leading networking platform
and solutions provider for smart energy networks, today announced
preliminary financial results for its fourth quarter and year ended
December 31, 2013.

"For the full year 2013 we now expect top line to grow approximately
13%. We did not close a few expected deals which impacted our fourth
quarter results," said Scott Lang, Chairman, President, and Chief
Executive Officer. "We made good progress in expanding our global
footprint and growing our total backlog to a record $875 million,
representing growth of 17% year-over-year."

The Company is providing the following preliminary financial results:

For the full year 2013: 1

Non-GAAP revenue of $342 - $343 million up approximately 13%
year-over-year,

GAAP revenue of $325 - $326 million up approximately 66%
year-over-year,

Non-GAAP loss per share of ($0.08) - ($0.10), and

GAAP loss per share of ($4.55) - ($4.57), which includes a non-cash
deemed dividend of ($2.77) related to the Company's initial public
offering.

For the fourth quarter 2013: 1

Non-GAAP revenue of $88 - $89 million up approximately 5%
year-over-year,

GAAP revenue of $95 - $96 million up approximately 93% year-over-year,

Non-GAAP earnings (loss) per share of ($0.01) - $0.00, and

GAAP earnings (loss) per share of ($0.02) - $0.00.

1A reconciliation of expected GAAP to non-GAAP financial
results has been provided in the table below.

Conference Call

Silver Spring will host a conference call today at 2:00 pm PT (5:00 pm
ET) to discuss its preliminary fourth quarter and full year 2013
financial results and its outlook for the future. During the course of
this call, Silver Spring may also disclose material developments
affecting its business and/or financial performance. Listeners may
access the conference call live at 877-407-0832 (U.S.) or 201-689-8433
(International) or via webcast at http://ir.silverspringnet.com.

Silver Spring believes that its results of operations under generally
accepted accounting principles, or GAAP, when considered in isolation,
may only provide limited insight into the performance of its business in
any given period. As a result, Silver Spring manages its business, makes
planning decisions, evaluates its performance and allocates resources by
assessing non-GAAP and other financial measures such as non-GAAP revenue
(billings), cost of non-GAAP revenue (billings), non-GAAP gross profit
(loss), non-GAAP operating income (loss), non-GAAP net income (loss),
non-GAAP earnings (loss) per share, adjusted EBITDA, and total backlog,
in addition to other financial measures presented in accordance with
GAAP. Silver Spring believes that these non-GAAP and other financial
measures offer valuable supplemental information regarding the
performance of its business, and will help investors better understand
the sales volumes, and gross margin and profitability trends, as well as
the cash flow characteristics, of its business. The non-GAAP measures
should not be considered in isolation from, are not a substitute for,
and do not purport to be an alternative to, revenue, cost of revenue,
gross profit (loss), net income (loss), net income (loss) per share, or
any other performance measure derived in accordance with GAAP. Silver
Spring may consider whether other significant non-recurring items that
arise in the future should also be excluded in calculating the non-GAAP
financial measures it uses.

Non-GAAP revenue (billings) represents amounts invoiced for products for
which ownership, typically evidenced by title and risk of loss, has
transferred or services that have been provided to the customer, and for
which payment is expected to be made in accordance with normal payment
terms. Non-GAAP revenue excludes amounts for undelivered products,
services to be performed in the future, and amounts paid or payable to
customers. Non-GAAP revenue is initially recorded as deferred revenue
and is recognized as GAAP revenue when all revenue recognition criteria
have been met under Silver Spring's accounting policies as described in
Silver Spring's filings with the Securities and Exchange Commission.
Silver Spring reconciles revenue to billings by adding revenue to the
change in deferred revenue in a given period.

Cost of non-GAAP revenue (billings) represents the cost associated with
products and services that have been delivered to the customer,
excluding stock-based compensation and amortization of intangibles. Cost
of product shipments for which revenue is not recognized in the period
incurred is recorded as deferred cost of revenue. Deferred cost of
revenue is expensed in the statement of operations as cost of revenue
when the corresponding revenue is recognized. Costs related to services
are expensed in the period incurred. Silver Spring reconciles cost of
revenue to non-GAAP cost of revenue by adding cost of revenue to the
change in deferred cost of revenue, less stock-based compensation and
amortization of intangibles included in cost of revenue, in a given
period.

Non-GAAP gross profit (loss) is the difference between non-GAAP revenue
and cost of non-GAAP revenue.

Adjusted EBITDA is net loss adjusted for changes in deferred revenue and
deferred cost of revenue, other (income) expense, net, provision for
income taxes, depreciation and amortization, stock-based compensation
and certain other items management believes affect the comparability of
operating results.

Total backlog represents future product and service billings that we
expect to generate pursuant to contracts that we have entered into with
our utility customers and meter manufacturers. Total backlog includes
order backlog, which represents future billings for open purchase orders
and other firm commitments.

Forward-Looking Statements

This press release contains forward-looking statements that involve
risks and uncertainties. These forward-looking statements include
statements regarding the momentum in Silver Spring Networks' business,
future growth, fourth quarter and full year 2013 financial results, and
future financial results. Statements including words such as
"anticipate", "believe", "estimate" or "expect" and statements in the
future tense are forward-looking statements. These forward-looking
statements are preliminary estimates and expectations based on current
information and are subject to business and economic risks and
uncertainties that could cause actual events or actual future results to
differ materially from the expectations set forth in the forward-looking
statements. Important factors that could cause results to differ
materially from the statements herein include: our fourth quarter and
full year 2013 results are subject to our standard quarterly and annual
close review process; timing around customer decisions and deployment
pace; dependence on a limited number of customers and key suppliers;
general economic risks; specific economic risks in different geographies
and among different industries; failure to maintain or increase renewals
and increase business from existing customers; uncertainties around
continued success in sales growth and market share gains; lengthy sales
cycles with no assurances that a prospective customer will select Silver
Spring's products and services; amounts included in total backlog may
not result in billings or revenue; adverse publicity about, or consumer
or political opposition to, the smart grid; security breaches involving
smart grid products or services; the ability to integrate technology
into third-party devices and Silver Spring's relationship with
third-party manufacturers; execution risks related to new product
introductions and innovation; the ability to attract and retain
personnel, including members of Silver Spring's management team; changes
in strategy; technological changes that make Silver Spring's products
and services less competitive; competition, particularly from larger
companies with more resources than Silver Spring; risks related to
retention of management; international business uncertainties; the
ability to acquire and integrate other businesses; and other risk
factors set forth from time to time in Silver Spring's filings with the
SEC (News - Alert), copies of which are available free of charge at the SEC's website
at www.sec.gov.
All forward-looking statements in this press release reflect Silver
Spring's expectations as of January 16, 2014. Silver Spring undertakes
no obligation, and expressly disclaims any obligation, to update any
forward-looking statements in this press release in light of new
information or future events. In addition, the preliminary financial
results set forth in this press release are estimates based on
information currently available to Silver Spring.